Supreme Court's Major Verdict on DA Hike: No Room for Discrimination Anymore; Find Out Who Stands to Benefit

Update on DA Hike: Delivering its verdict, the Supreme Court explicitly stated that the impact of inflation affects both serving employees and retired pensioners equally.

DA Hike: In a landmark judgment delivered last Friday, April 10, the Supreme Court ruled that state governments can no longer discriminate between serving employees and pensioners while hiking the Dearness Allowance (DA). Upholding the right to equality for retired employees, a bench comprising Justice Manoj Misra and Justice Prasanna B. Varale dismissed appeals filed by the State of Kerala and the Kerala State Road Transport Corporation (KSRTC). Furthermore, the Court affirmed that both serving and retired employees are "equally" affected by inflation.

What is the Case?

The case dates back to 2021. At that time, citing a severe financial crisis, the Kerala government and KSRTC attempted to justify providing a lower Dearness Allowance to pensioners compared to serving employees. Treating pensioners and active workers as distinct categories, they characterized the matter as a policy decision. During that period, employees were granted a 14% DA hike, while pensioners received an 11% Dearness Relief (DR). Both the Kerala government and KSRTC argued that their precarious financial situation precluded them from granting equal Dearness Relief to everyone.

What Did the Court Say?

Completely rejecting the arguments put forth by the Kerala government and KSRTC, the Supreme Court asserted that financial constraints cannot serve as grounds for violating constitutional rights. Discriminating between the two groups constitutes a direct violation of Article 14 (the Right to Equality) of the Constitution. The Court emphasized that both pensioners and serving employees face the brunt of inflation equally.

The Supreme Court upheld the earlier verdict of the Kerala High Court, which had directed KSRTC to provide Dearness Relief to pensioners at the exact same rate being accorded to its serving employees. This court verdict has brought significant relief to thousands of retired employees in Kerala who had long been demanding equal Dearness Relief. The Supreme Court's ruling is expected to impose an additional financial burden of crores of rupees on the KSRTC, as it will now be required to provide Dearness Relief (DR) to pensioners at a uniform rate as well. Detailed orders regarding the payment of arrears are expected to be issued at a later date.